This article analyzes the competitiveness of US LNG exports,
considering a range of factors including the structure and
special features of US LNG export contracts, LNG plants capacity
and supply outlook, potential markets for the United States
liquefied natural gas, as well as relation between cost of supply
and import prices in Europe, the Asia-Pacific region and Latin
America. This paper defines the key features of the US LNG
business model and its impact on final markets. With the launch
of Sabine Pass Train 1, the revolution on the global LNG market
did not occur. Almost 90% of the US natural gas is sold under
long-term contracts that, as is the case with Russian gas,
contain the "take-or-pay" clause: importers must purchase LNG
under FOB terms, regardless of gas withdrawal volumes, and
undertake to pay the liquefaction fee for previously agreed
capacities.

This business model not only covers the risks of failing to
achieve cost recovery at American LNG plants, but also guarantees
export volumes nearing the contracted capacity of new plants.
Given that European and Asian buyers have reserved 48 million
tons of annual capacity before 2020, these volumes are likely to
appear on the market. Since long-term contracts are flexible
enough, about 60% of capacity does not have a destination country
specified in the contract, the final market for US LNG is
determined by the economic viability of organizing exports to a
particular region. In the article we analyze how much profit or
loss will US gas importers generate and whether US LNG will
compete with Russian gas.

Part of the OGEL Special Issue on "Liquefied Natural Gas
(LNG)".
Added to the 2017 issue by the publisher as
addendum after independent third party review in March
2018.